Abc Recommends Loss Of Liquor License For Restaurant Owner

February 10, 1989|By RON SHAWGO Staff Writer

An Alcoholic Beverage Control Board hearing officer has determined that three restaurants owned by Charles N. Kidd, including the Continental Room in Hampton, underreported liquor sales and should have their liquor licenses revoked.

The officer also recommended that the fourth restaurant operated by Kidd, The Continental Room in Chesapeake, also lose its license because the other violations show he is of unfit moral character to sell alcohol.

According to testimony during a two-day hearing last fall that led to the findings, Kidd allegedly was involved in a scheme to underreport $1.3 million in liquor sales. State ABC officials say it is one of the largest cases of underreporting in more than a decade.

The ABC findings involve administrative civil violations of state ABC regulations. But papers filed in U.S. District Court show Kidd is under investigation for criminal tax evasion charges for failing to report more than $2 million in income from the restaurants.

The hearing officer's ruling is a recommendation to the three-member ABC board, which can modify the decision. Kidd also has 10 days to appeal the ruling to the board and Decker said he plans to do that.

"I think certainly that the penalty doesn't fit the crime, so to speak, not that there was a crime here," Decker said.

During the hearings, Decker said Kidd would not testify to defend himself for fear his comments would be used against him in the criminal tax investigation. Kidd was called to the stand by the state but invoked his right not to testify against himself.

Kidd is the sole stockholder in the two corporations that own the four restaurants, which are located in in Hampton, Chesapeake, Roanoke and Virginia Beach. The restaurant in Hampton has not been open for business since July.

The hearing officer found the companies in violation of all 45 charges heard. The violations include selling unauthorized liquor, filing false annual reports with the ABC, refilling bottles with illegally bought liquor and underreporting liquor sales.

Former restaurant managers testified that at Kidd's request they illegally bought liquor at retail stores and poured it into bottles stamped with the identifying number of wholesale outlets assigned to the restaurants.

The bottles are stamped so state authorities make sure liquor sellers are paying their share of taxes as well as complying with a state law that requires that alcoholic beverages account for no more than 55 percent of total sales.

One of the former managers testified that Kidd's home on Calypso Lane in Virginia Beach was used to refill bottles for the Virginia Beach restaurant.

John Hughes, the ABC special agent in charge of the investigation, testified that Kidd's records regarding liquor sales were manipulated. An analysis between them and ABC records showed that in a three-year period three of the restaurants bought $148,563 in liquor illegally and underreported liquor sales by $1.3 million.

Decker said he will argue on appeal that Hughes' accounting procedures were flawed.

"I think the record stands for itself," Hughes said Thursday. "There was no evidence to contest the accuracy of the records."